Extrapolating; Facebook and MySpace combined are projected to generate only 2.8B in worldwide advertising revenue in 2011, of which a 50% revenue share with major labels would provide a total 1.4B in gross income to subsidize an industry-wide free-music initiative. The recorded music industry is currently projected to generate in the area of 30B in global sales for 2007.From Peter Kafka, Silicon Valley Insider:
A reminder, via eMarketer, that hype aside, advertising spend on online social networks is still relatively modest: About $960 million in the U.S. this year, (and merely another $300 million in the rest of the world) -- less than 5% of the total U.S. market.Link
Keep in mind that most of those dollars are from guaranteed deals from Google and Microsoft, who have multiyear pacts with MySpace and Facebook, respectively -- and by all accounts, both GOOG and MSFT made those commitments for strategic reasons, not financial ones.
From eMarketer:
- MySpace and Facebook together receive more than 70% of all ad spending.
- 50% of all online adults and 84% of online teens will use social networking each month in the U.S. by 2011.
- Worldwide social network ad spending to top $4 billion in 2011.
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